Cashed up from a recent financing, the company formerly known as Global Vanadium has a new focus: Newfoundland gold.
This week K9 Gold Corp (TSX-V:KNC) (FSE: 5GP) announced it is ready to go to work on its recently acquired Stony Lake property, which lies southwest of Sokoman’s Moosehead project, and northeast of Marathon Gold’s Valentine Lake deposit – on the Valentine Lake Trend in Central Newfoundland.
The company also just announced a $2.5 million raise to fund the acquisition and exploration on the property. The super-tight share structure, 18 million shares, saw the stock rocket from $0.11 to $0.99 but it is still only a $15 million market cap. The project is early stage but is known to have numerous anomalous to high-grade gold showings.
Central Newfoundland Gold Belt
Anyone invested in the junior exploration sector knows that deep and long, active structures are one of the most important commonalities in big mineral deposits.
The Central Newfoundland Gold Belt may be one of the most deep-seated structurally prepared environments on the planet. During a period known as the Taconic orogeny that lasted from 480-430 million years ago, the continental plates of Laurentia and Gondwana collided, closing the Iapetus Ocean that lay between them. The islands we now know as Newfoundland, Ireland and Great Britain, were crushed between the continental plates, and deep crustal breaks were created that remained as active fluid conduits for millions of years. The image below shows the five major tectonic breaks that have been traced back to their origins over 400 million years ago and are identifiable across the continents for thousands of kilometers.
These deep crustal breaks are important mineralizing structures for numerous multi-million-ounce gold deposits along these trends. Dalradian’s Curraghinalt gold deposit in Northern Ireland, OceanaGold’s (TSX:OGC) Haile deposit in Southern Carolina, and Marathon Gold’s (TSX:MOZ) Valentine Lake deposit, which lies just southwest of New Found Gold’s (TSX-V:NFG) Queensway discovery, each provide evidence that these structures are an integral conduit for gold deposits.
The island’s geology is divided into a number of sub-zones that represent the major components of this ancient continental collision zone. To the north, rocks in the Humber Zone represent the continental margin of Laurentia. The geology of Central Newfoundland is characterized by the Dunnage Zone – divided into the Notre Dame and Exploits subzones. These are split by a fault called the Red Indian Line, interpreted to mark the collision of the continental plates (see map below).
The Notre Dame Subzone to the north and the Exploits Subzone to the south formed on opposite sides of the ancient Iapetus Ocean.
According to a report by the Geological Survey of Newfoundland and Labrador,
The northeastern Exploits Subzone is divided into two dominant sedimentary successions that are separated by the Silurian (or younger) Dog Bay Line, a series of faults thought by Williams et al. (1993) to mark a major Silurian tectonic boundary – possibly a suture zone.
The Exploits Subzone and Gander River Ultramafic Belt (GRUB) contain the majority of Newfoundland’s gold mineral occurrences and exploration efforts, including New Found Gold’s 2019 discovery of 92.86 g/t Au over 19 meters near surface.
The Exploits Subzone and GRUB regions have been the focus of major staking and financing throughout 2020, with increased exploration activities forecasted in the area, moving into 2021.
East of the Dog Bay Line, shown in red in the first map above, is the Davidsville Group, a sequence of Cambro-Ordovician silicilastic rocks. West of the Dog Bay Line, are Cambrian to Silurian rocks of the Victoria Lake Supergroup, and the Badger and Botwood groups.
What makes the Exploits Subzone such a prime target for gold discovery? Prominent regional thrust faulting shows evidence of a long tectonic history including fluid migration.
Trans-compressional strike-slip movement in the regional siliciclastic units underlain by mixed mafic volcanics of the Gander River Ultramafic Belt (GRUB) creates a highly prospective gold environment, exemplified by the Bendigo gold deposit in Victoria (Australia), and Meguma gold deposits (Nova Scotia), which display similar structural and geological controls.
The Exploits Subzone features abundant reactivation features such as sericite seams, iron-rich carbonate hydrothermal alteration and quartz-carbonate veinlets.
Most gold properties overlie one of the deep-seated structures Newfoundland is famous for, and have a secondary structure, like an anticline, splay or sub-splay, that provides a trap for the gold mineralization.
Again quoting from the Geological Survey of Newfoundland and Labrador,
Most of the showings investigated so far are associated with relatively deeply formed (ca. 5 km or greater), late-orogenic quartz veins that are associated with shear zones or folds. They may have associated wallrock alteration and mineralization (e.g., arsenopyrite, pyrite). Prospects such as the Golden Promise, Knob, Dome, StarTrack and Titan prospects are examples of this broad class. A less common group of Au occurrences that has also been documented is that of the very shallow depth (ca. <1 km), low-sulphidation epithermal environment…
Regardless of the precise deposit model that is eventually chosen, there is abundant evidence that the Silurian rocks of the “Botwood basin” have great potential for further gold discoveries.
K9 Gold’s Stony Lake project is within Central Newfoundland’s Cape Ray/ Valentine Lake structural trend. The 13,625-hectare property is on trend between Sokoman’s Moosehead discovery to the northeast, and Marathon Gold’s Valentine Lake deposit to the southwest.
Stony Lake was optioned earlier this year from District Copper Corp. Under the option agreement, Global Vanadium, now K9 Gold Corp, can earn a 75% in the property by making a series of cash payments and share issuances. The remaining 25% interest is earnable, by paying District $500,000 within the next three years, and issuing 2 million shares.
In 2019 an extensive field program focused on prospecting, mapping and sampling, along with a property-wide airborne magnetometer and radiometric survey to map bedrock lithologies, structural features and areas of structurally controlled potassic alteration, identified numerous target areas, within two separate styles of gold mineralization:
Eight areas of highly anomalous to high-grade gold (15.05 g/t) mineralization were identified, hosted in quartz feldspar porphyry, pyrite and arsenopyrite-bearing reduced sandstone, quartz stockworks and quartz veins.
According to K9’s project page,
The 2019 airborne survey and subsequent interpretation clearly show that the structural trend of Sokoman’s Moosehead discovery crosses onto the Stony Lake East property. This appears to be a primary basement structure, with multiple splays off it. This defines a high-priority exploration target in the basement below the Botwood Group.
In addition, the interpretations indicate that concentration of zones of gold mineralization discovered in the Botwood sediments in 2019 is along a NNE structural trend in the Botwood. Although this is a different, parallel, trend to that discussed above, the model is the same, ie. a major structure with gold-bearing fluids emanating from a basement structure depositing low-grade mineralization in the Botwood.
The 2020 exploration program will focus on the above-mentioned eight mineralized areas identified during 2019 field work. A VTEM geophysical survey will cover the whole property at 200-meter line spacings, with the goal of better defining 2019’s geophysics. The news release states,
That interpretation clearly shows that the structural trend of the Sokoman’s Moosehead discovery crosses onto the Stony Lake East property, angling across the northern part of the property. This appears to be a primary basement structure, with multiple splays off it. This in turn defines a high priority exploration target in the basement below the Botwood Group.
Jeff Poloni, CEO, remarks, “Our team is excited to get boots on the ground in Central Newfoundland, where district-wide drilling success, particularly New Found Gold’s recent high grade intercepts, continues to highlight the area’s latent potential. We’re looking forward to complete this phase of exploration and commence preparations for the project’s first systematic drill program.”
Junior mining, like real estate, is all about location.
The odds of a gold junior hitting a discovery hole, building a resource and getting bought out by a major gold miner are slim. But if the company’s project(s) happen to be surrounded by well-mineralized neighbors, their chance of success goes up dramatically.
This is exactly what we see happening in the Central Newfoundland Gold Belt, where New Found Gold, Sokoman Minerals and Marathon Gold, have all found joy at the drill bit. This includes New Found Gold’s 2019 blockbuster discovery at the Keat’s Zone of its Queensway project – 92.86 g/t Au over 19m, including 285.2 g/t Au over 6m.
K9 Gold’s Stony Lake is in the right neighborhood. The property is bang-on the same trend as Sokoman’s Moosehead and Marathon’s Valentine Lake. The red dots couldn’t be better lined up. The Valentine Lake Trend is within the Exploits Subzone, containing the majority of Newfoundland’s gold mineral occurrences and exploration efforts.
“Close-ology” is often invoked as a reason for investing in a junior exploration company, especially if it’s in an area play. But we need more than proximity to other deposits. We need companies that can raise money and can generate news flow of their own.
In early August K9’s predecessor, Global Vanadium, announced a private placement for up to $2.5M. Funding box, checked. KNC has a tight share structure, thereby checking another box.
It’s early stage, but Stony Lake is getting “boots on the ground” very soon, will have a lot of news flow of its own and is situated in a mineralized district that is all but guaranteed to deliver steady news flow for years. There is no doubt in my mind that with all the money being spent, there will be more discoveries. K9 Gold, in my opinion, is in a great position to benefit not only from its own news but from all the news coming from one of Canada’s premier area plays.
k9 Gold Corp.
Shares Outstanding 28,656,879m
Market cap Cdn$17.19m
Richard (Rick) Mills
Legal Notice / Disclaimer
Ahead of the Herd newsletter, aheadoftheherd.com, hereafter known as AOTH.
Please read the entire Disclaimer carefully before you use this website or read the newsletter. If you do not agree to all the AOTH/Richard Mills Disclaimer, do not access/read this website/newsletter/article, or any of its pages. By reading/using this AOTH/Richard Mills website/newsletter/article, and whether or not you actually read this Disclaimer, you are deemed to have accepted it.
Any AOTH/Richard Mills document is not, and should not be, construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.
AOTH/Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified. AOTH/Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of AOTH/Richard Mills only and are subject to change without notice. AOTH/Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, AOTH/Richard Mills assumes no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this AOTH/Richard Mills Report.
AOTH/Richard Mills is not a registered broker/financial advisor and does not hold any licenses. These are solely personal thoughts and opinions about finance and/or investments – no information posted on this site is to be considered investment advice or a recommendation to do anything involving finance or money aside from performing your own due diligence and consulting with your personal registered broker/financial advisor. You agree that by reading AOTH/Richard Mills articles, you are acting at your OWN RISK. In no event should AOTH/Richard Mills liable for any direct or indirect trading losses caused by any information contained in AOTH/Richard Mills articles. Information in AOTH/Richard Mills articles is not an offer to sell or a solicitation of an offer to buy any security. AOTH/Richard Mills is not suggesting the transacting of any financial instruments but does suggest consulting your own registered broker/financial advisor with regards to any such transactions
Richard does not own shares of K9 Gold Corp. (TSX.V:KNC). KNC is a paid advertiser on his site aheadoftheherd.com